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Investing.com - UBS maintained its Buy rating and $350.00 price target on McDonald’s (NYSE:MCD) stock on Friday, citing an improved setup following recent share price declines. According to InvestingPro data, the stock’s current price of $285.63 appears fairly valued based on proprietary Fair Value calculations, with analyst targets ranging from $260 to $364.
The fast-food giant’s stock has experienced a significant pullback, dropping 11% since May 19, which UBS views as creating an attractive entry point for investors. InvestingPro analysis shows the stock’s RSI indicates oversold territory, while maintaining a relatively low beta of 0.56, suggesting lower volatility than the broader market. The firm highlighted McDonald’s positioning for multiyear market share gains despite current pressure on quick-service restaurant sales.
UBS expects McDonald’s same-store sales to strengthen in the second half of 2025, driven by new products, value initiatives, and marketing plans. The firm believes these efforts will help the company perform well even as spending pressure continues for lower and middle-income consumers.
International improvement is anticipated in the coming quarters following first-quarter results, according to UBS. The firm noted McDonald’s favorable longer-term outlook includes accelerating unit growth to 4-5% and general and administrative expense leverage.
UBS projects McDonald’s earnings growth profile to reach at least high single digits, supporting its continued positive stance on the stock despite defensive stocks currently being out of favor in the market. The company’s strong financial position is reflected in its 49-year streak of dividend increases, with a current yield of 2.48%. Discover more insights about McDonald’s and 1,400+ other stocks with comprehensive Pro Research Reports, available exclusively on InvestingPro.
In other recent news, McDonald’s has settled a $10 billion lawsuit with Byron Allen over ad spending, resolving a legal dispute with Entertainment Studios Networks and the Weather Group. The settlement terms remain confidential, but McDonald’s will purchase advertisements from Allen’s companies at market value. Meanwhile, Krispy Kreme (NASDAQ:DNUT) announced the end of its partnership with McDonald’s USA, effective July 2025, after determining the business model was not financially viable for Krispy Kreme. This partnership covered approximately 2,400 McDonald’s restaurants. McDonald’s has also been in the spotlight with differing analyst opinions. Jefferies maintained a Buy rating for McDonald’s, citing its defensive qualities and growth outlook, with expectations of global unit growth and strong operating margins. Conversely, Redburn-Atlantic downgraded McDonald’s from Buy to Sell, lowering its price target to $260 due to concerns about weakening traffic and pricing fatigue in the U.S. market. The differing analyst perspectives highlight contrasting views on McDonald’s future performance and investment appeal.
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